When they sell their crop this autumn, prairie grain farmers will welcome the extra revenue from higher initial payments announced last week, a first step in catching up to super hot international grain prices.
Likely they can look forward to another initial payment increase.
Round Hill, Alta., producer Humphrey Banack said last week the boost in revenue will help pay down financing costs on his 3,500 acre farm.
“Interest payments are a big part of my operation and any time I can get money faster, I pay down debt and my interest costs fall,” he said Oct. 4. “This is very good news.”
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At Souris, Man., Walter Finley said it will mean he gets some money for the grain he sells. So far, his limited deliveries have been credited against his cash advance.
“Anytime there is an increase in prices, it’s a good thing and it will put money in my pocket,” he said. “But what I’m disappointed in is how long it took the government to approve it.”
After weeks of pressure from prairie farmers and opposition politicians, the federal government last week approved an increase in initial payments for all board grains, ranging from $23.50 to $43.50 per tonne, with the largest amount going to durum.
On Oct. 1, the Canadian Wheat Board recommended another increase to reflect soaring market prices and it is expected Ottawa will respond by mid-November.
Initial payments, which are guaranteed by the federal government, typically are about 70 percent of expected final prices.
The CWB requested the increase Aug. 15 but grain prices have moved to record or near record levels since then. Even with the hike, the initials are well out of date compared to the September Pool Return Outlook.
Durum initials are about 43 percent of the September PRO, red spring wheat is 59 percent of the PRO, and feed barley is 51 percent of the PRO.
Only initial payments for malting barley are close to the 70 percent level.
Last week, agriculture minister Gerry Ritz denied opposition accusations that the government delayed approving the price hike in a deliberate political manoeuvre to undermine the CWB.
He said in a news release it normally takes between eight and 12 weeks for government to react to a board recommendation on initial price changes. This time, it took less than seven weeks.
Ritz added in an interview that he considered the timing was good considering that the ministerial transition between himself and Chuck Strahl occurred at the same time.
“Everything stops for a little while when that happens,” said Ritz.
As for the new request for an increase, he didn’t want to speculate whether it would be processed faster or slower than the last one.
“This latest ask has a few new twists to it that need to be assessed,” he said. “Our goal though is to get money flowing to producers as fast as we can.”
A board official confirmed that the decision time was similar to the experience with past governments.
“Our experience is that it takes between six and eight weeks typically and this was within that range,” said CWB spokesperson Maureen Fitzhenry. “It has been as short as four weeks but it also has taken as long as 12 weeks but that mid-range is typical.”
Still, Liberal agriculture critic Wayne Easter insisted Oct. 4 the government had dragged its feet, calling the seven-week gap between the board’s Aug. 15 recommendation and the Oct. 2 approval a delay of almost two months.
“This was a deliberate act designed to undermine the CWB in ensuring that farmers received the highest returns possible,” he said in a statement issued from his Prince Edward Island riding.
